Chrysler to the Banks

The biggest corporation bank credit in U.S. history--$100,000,000--was arranged by Chrysler Corp. last week. Chrysler can borrow the money any time within five years, must pay the 175 participating banks about 1 3/4% interest. If no loans are made, Chrysler pays a $500,000 commission anyway for the privilege of the deal.

But Chrysler is pretty sure to borrow. The company is huffing & puffing to boost munitions output to $1,750,000,000 annually, nearly three times average 1937-41 sales. As a starter, it spent at least $60,000,000 of its own cash last year for new plants, new machinery, more inventory. Consequently, its year-end cash was only $69,000,000--a four-year low, and a reason for Chrysler's recent dividend cut.

By going to the banks instead of to Wall Street, Chrysler saves not only present but future headaches. The end of the war (and Chrysler's supersales) will not catch the company saddled with unwieldy bonds or preferred stock.

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